How To Setup Tax Exemption In E-business Tax For Suppliers

How To Setup Tax Exemption In E-business Tax For Suppliers

For certain Suppliers, the Tax Exempt classification should be set so that no tax is added to the AP invoice, during the validation/calculation of tax process.

The following provides step-by-step instructions on how to accomplish this.

1. Navigate to Trading Community Manager Responsibitly > Trading Community: Administration > Classifications
2. Click on "Create Class Category"
3. Enter values for
• Class Category ::
• Class Category Meaning ::
• Class Category Description ::
• Delimiter :: leave it default
4. Under "Assign Entities"
• Ensure that you select the default
• Select :: tick mark
• Table Name :: HZ_PARTIES
• Condition (Where Clause) :: WHERE PARTY_TYPE = 'ORGANIZATION'
5. Click on "Apply and Create Class Codes"
6. Enter values for the following
• Class Code :: for example "NO TAX"
• Meaning :: "NO TAX"
• Description :: No Tax for party X
7. Click on Apply
8. Click on compile
9. Now Requery the class category ...
10. You should see the associated class codes
11. Navigate to Tax Managers Responsibility > Parties > Party Classification
12. Create
13. Provide the following values
• Party Classification ::
• Fiscal Classification Type Code ::
• Name ::
• Effective From ::
14. Under the "Associated Tax Regimes" region
• Regime Code ::
• Name ::
• Effective From ::
15. Apply & save
16. Navigate to Tax Managers Responsibility > Parties > Party Tax Profiles
17. Query for Party Type :: Third Party
• Party Name :: X
• Click on update tax profile
• Ensure that the "Allow Tax Applicability" is not enabled
18. Click on Classifications Tab
• For Fiscal Classification Type Code ::
• Fiscal Classification Code :: NO TAX
• Fiscal Classification Name :: NO TAX
• Effective From ::
19. Click on Apply
20. Navigate to Tax Managers Responsibility > Advanced Setup Options > Tax Determining Factor Sets
21. Click on Create
22. Enter the following values
• Tax Determining Factor Set ::
• Name ::
• Ledger ::
• Regime Code ::
• Determining Factor Class :: Party Fiscal Classification
• Class Qualifier :: Ship from Party
• Determining Factor Name ::
23. Click on Apply
24. Navigate to Tax Managers Responsibility > Advanced Setup Options > Tax Condition Sets
25. Click on Create
• Enter values for
• Tax Condition Set ::
• Name ::
• Determining Factor Set::
• Country Name:: United States
26. Click on Continue
27. Enter value for
• Value/From Range ::NO TAX
28. Click on Finish
29. Navigate to Tax Managers Responsibility >Tax Configuration > Tax Rules
30. Create a "Determine Tax Applicability" Rule using the previously created Tax Determining Factor Set & Tax Condition Set
31. Ensure that when you create this rule set the applicability to "Not Applicable"
    In order to have the "Not Applicable" value in the LOV, Determine Tax Applicability should have a default value of "Applicable".
32. Save
33. Bounce the Apache Server
34. Create a new invoice to the supplier 'X'
35. Click "Calculate Tax" no tax gets calculated

Please note that ...the above steps are done so that system does not calculate tax on a particular party (supplier) automatically....but still if user needs to have tax for this invoice...they can create a manual

tax line